Stablecoins vs Bitcoin: Difference and Comparison

As the world is evolving, thus people are becoming more intelligent and acquiring intellectuality. Thus, humans keep on making modifications in order to make their economic life safe and secure.

Bitcoin is the cryptocurrency market’s king, and many exchanges accept Bitcoin as a significant trade currency. Stablecoin is a new cryptocurrency similar to Bitcoin, except its value is fixed and not backed by any assets.

Key Takeaways

  1. Stablecoins are cryptocurrencies designed to have a stable value, pegged to a stable asset like the US dollar. At the same time, bitcoin is a decentralized cryptocurrency with a volatile price.
  2. Stablecoins are used as a hedge against cryptocurrency market volatility, while bitcoin is seen as a high-risk, high-reward investment.
  3. Stablecoins are more widely accepted as a form of payment than bitcoin due to their stable value, while bitcoin is more commonly used as a store of value or speculative investment.

Stablecoins vs Bitcoin

Stablecoin is a sort of cryptocurrency which is more stable. The market value of stablecoin remains at $1.00. A single entity controls stablecoins. It is a centralized type of cryptocurrency. Bitcoin is a type of decentralized cryptocurrency whose market value changes continuously. Its market value is unpredictable.

Stablecoins vs Bitcoin
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Stablecoin’s value remains constant at $1.00. The value of Stablecoin fluctuates in predictable ways. Stablecoins are controlled by a single entity.

Bitcoin is available for purchase at anything from $0.05 to $20,000. It’s hard to anticipate how Bitcoin’s value will fluctuate in the future. Bitcoins are a decentralised currency.

Comparison Table

Parameters of ComparisonStablecoinsBitcoins
Business TransactionsSuitableNot suitable
PredictionFluctuations can be predicted.Impossible to predict.
CentralisationCentralisedDecentralised
Value$1.00$0.05 to $20,000
StabilityStable and non-volatile.Not stable and highly volatile.
RegulationRegulatedUnregulated
UseReal-life transaction and use.Exchange, gambling, trading, payments.

What are Stablecoins?

A stablecoin is the newest type of evolving cryptocurrency. It aims at providing price stability by using a reserve asset as a backer.

Despite being too popular, the values of Bitcoins keep on changing frequently. For example, it climbed from roughly $5,950 in November of last year to over $19,700 in December.

A currency should primarily serve as a medium of monetary exchange and a means of storing monetary value, with its value remaining relatively steady over longer periods.

stablecoins

What is Bitcoin?

Bitcoin belongs to the family of digital currencies.

A tremendous amount of computational power validates all Bitcoin transactions. These digital types of currencies are neither backed nor issued by any financial institution or government forums.

The abbreviation for Bitcoin is “BTC.” The system of Bitcoin consists of a network of computers, which are also called “miners” or “nodes”. A blockchain can be viewed as a collection of blocks in very systematic and metaphorical terms. Many people have higher investment plans, and big businesses sometimes do their transactions via Bitcoins. The reason behind this is a small change in value in either an increasing or decreasing way won’t affect them much.

bitcoin

Main Differences Between Stablecoins and Bitcoin

  1. Stablecoins are regulated. On the other hand, Bitcoins are unregulated.
  2. Stablecoins are used and can be used for real-life use and transactions as well. However, Bitcoins are used for exchange, trading, Educated gambling, and payments.
Difference Between X and Y 2023 04 30T093646.277
References
  1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3326823
  2. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3605451

Last Updated : 25 June, 2023

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      Matthews Martin

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